DEUTSCHE BANK AG (LONDON BRANCH) v CENTRAL BANK OF VENEZUELA

Foreign constitutional judgments which expressly quash executive acts may fall within the exception to the foreign act of state principle. That exception does not extend to judgments which merely imply that an executive act is invalid.

Foreign judgments having erga omnes effect are not thereby judgments in rem for English recognition purposes. Any common-law expansion of the recognised categories must be cautious, particularly where affected persons had no notice or opportunity to be heard.

The one-voice principle requires the court to examine a foreign judgment holistically. A judgment which starts from a view of foreign state authority inconsistent with the executive’s recognition cannot be recognised.

The proceedings concerned approximately US$1.95 billion of Venezuelan gold held by the Bank of England and approximately US$120 million held by court-appointed receivers. The dispute was between boards appointed respectively by President Maduro and interim President Guaidó to represent the Central Bank of Venezuela.

The Supreme Court had held that English courts were bound by the executive’s recognition of Mr Guaidó and that foreign executive acts could be considered where the foreign state’s courts had expressly quashed them. The Maduro Board sought recognition of five judgments of Venezuela’s Supreme Tribunal of Justice declaring the Guaidó appointments invalid. The central issues were whether those judgments were qualifying quashing decisions, whether they were capable of recognition, and whether recognition was barred by the one-voice principle or natural justice.

1. Quashing decisions. The court held that only foreign judgments which expressly identified and declared the relevant executive acts nullities, or made a sufficiently specific forward-looking ruling, fell within the exception identified by the Supreme Court. Judgments dealing with the Transition Statute, or reasoning which only implied that the executive acts were invalid, did not qualify. Five judgments met the required threshold: judgments 6, 74, 247 and 67, together with judgment 59, as identified in the judgment (paras [143]-[150]).
2. Recognition. The five judgments were not judgments in rem. An erga omnes effect is not equivalent to English in rem status. The court applied the cautious approach in Air Foyle v Center Capital and declined to enlarge the recognised categories merely because the foreign judgments had general effect. Their international dissemination could not alter their legal status. The proposed extension was substantial, not incremental, and was unsupported by authority (paras [162]-[189]).
3. One voice. Alternatively, recognition would be barred by the one-voice principle. The court adopted a holistic approach, considering both reasoning and effect. The judgments took as their starting point a view that Mr Guaidó was not the constitutional interim President and that Mr Maduro remained President. That premise was inconsistent with HMG’s recognition and could not be severed from the judgments’ reasoning (paras [191]-[218]).
4. Natural justice. Alternatively, the judgments involved serious and clear breaches of natural and substantial justice. The affected persons received no notice, were not represented, and had no opportunity to make submissions. The fact that constitutional proceedings may affect many people did not justify hearing absolutely nobody where identifiable executive acts were directly challenged. A subsequent argument that the same result would have followed could not cure an unfair trial (paras [219]-[239]).
5. The public-policy defence would have failed because the alleged foreign-policy conflict was insufficiently specific and the high threshold was not met. The separate challenge based on systemic lack of impartiality and independence would also have failed for want of cogent evidence (paras [240]-[263]). The Guaidó Board succeeded. The judgments were not capable of recognition, and the alternative defences also succeeded.

The judgment records that the dispute had previously reached the Supreme Court in [2021] UKSC 57. This judgment determined the remaining recognition issues at first instance.